Tesco said it was not deterred by the turmoil in financial markets in the Far East saying that the longer term prospects in the region were still good. "There is no commitment yet but it is a good time to look. These are strong consumer markets."
Tesco is keen to establish if markets such as Thailand and Taiwan would prove profitable areas for the hypermarket format it has expanded so successfully in central Europe. Tesco already has stores in Poland, Hungary and Czechoslovakia and is expanding rapidly. It will open six more hypermarkets in these countries next year and a further 6-10 the year after.
Tesco's Far Eastern adventure highlights the different strategies of the top food retailers. While Tesco is concentrating on Europe and the Far East, Sainsbury's still feels the US is a more profitable route to expansion. Asda is performing well under its lower prices proposition while Safeway which issued another profits warning next week looks set for a period of consolidation during which it will look to return cash to shareholders after its plans to merge with Asda were called off.